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Experts: Short sales may not cure the ailing real estate market

March 12, 2010 - Due to the disappointing results of the government's Home Affordable Modification Program (HAMP), federal officials have begun to promote short sales as an option to help struggling homeowners prevent foreclosure. However, some industry experts suggest that this solution is nothing more than a quick fix, the Miami Herald reports.

The Home Affordable Foreclosure Alternative Program, which is slated to begin in April, will present short sales as the next step for individuals who fail to qualify for HAMP. The initiative will offer incentives to both the borrower and the lending institution involved in each transaction.

Although this program appears to be an alternative that will benefit both parties, some real estate experts are already anticipating an onslaught of problems with this proposed solution.

Currently, short sales do not account for a large portion of the real estate market because they typically involve complicated and time-consuming proceedings. In many cases, interested homebuyers tend to get frustrated and end up walking away before a deal is closed, according to the news source.

To prevent some of these issues, home sellers who are considering a short sale should consult a real estate agent and begin organizing any necessary documents before they enter any negotiations, according to the National Association of Realtors.

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